Life is a planetary feature that depends on its environment, but it has also strongly shaped the physical conditions on Earth, having created conditions highly suitable for a productive biosphere. Clearly, the second law of thermodynamics must apply to these dynamics as well, but how? What insights can we gain by placing life and its effects on planetary functioning in the context of the second law? In Kleidon (2010), I described a thermodynamic Earth system perspective by placing the functioning of the Earth system in terms of the second law. The Earth system is represented by a planetary hierarchy of energy transformations that are driven predominantly by incoming solar radiation, these transformations are constrained by the second law, but they are also modified by the feedbacks from various dissipative activities. It was then hypothesised that life evolves its dissipative activity to the limits imposed by this hierarchy and evolves feedbacks aimed at pushing these limits to higher levels of dissipative activity. Here I provide an update of this perspective. I first review applications to climate and global climate change to demonstrate its success in predicting magnitudes of physical processes, particularly regarding temperatures, heat redistribution and hydrological cycling. I then focus on the limits to dissipative activity of the biosphere. It would seem that the limitations by thermodynamics act indirectly by imposing limitations associated with transport and material exchange. I substantiate this interpretation and discuss the broader implications for habitability, the emergence and evolution of life, and the contemporary biosphere.